➽ What are CIF freight and FOB freight
In Portuguese CIF means “cost, insurance and freight”. This modality is paid at the origin, and the seller is responsible for the risks and costs of transportation until the delivery of the goods to the recipient. The end consumer, in general, prefers to use the CIF, although it is more expensive, because it does not have to deal with handling and other details.
FOB freight, in literal translation, means “free on board”. The seller's liability ends when the goods are dispatched. It is the buyer, then, who assumes the costs and risks of transport from shipment, since the supplier's liability ends when the product enters transport. It is a more favorable alternative for sellers.
Thanks to its characteristics, each modality is more common in different markets and circumstances. CIF freight, for example, is more popular in business to consumer (B2C) businesses or with a high volume of shipments to different customers. The complexity of organizing different freight makes FOB barely viable. Therefore, CIF is the most used in ecommerce. the end customer pays for the goods and freight all at once.
FOB freight is more used in business to business (B2B) deliveries, especially when it comes to cargo with high added value or with very high freight cost. It is common in industries that buy products from different suppliers and that already have preferred carriers (which collect the products directly from the suppliers).
The CIF and FOB freights are included in the International Trade Terms (International Commercial Terms INCOTERMS). They represent the determinations of the International Chamber of Commerce, which is the body responsible for regulating trade between different countries.
When CIF freight is negotiated, whoever sends the cargo (the supplier) has the responsibility to pay for the freight and insurance of the goods. This payment is then made at the origin of the transport. Thus, the value of the product, the cost of freight and transport insurance are included in the sale price.
If the customer chooses FOB freight, he is responsible for paying for the transportation and insurance of the goods. It is common for this payment to be made upon receipt of the product. An example of FOB for the final consumer is the “Freight to Pay”, from the Post Office.
What are the costs of each freight
In CIF freight, the price is already included in the cost of the goods and is passed on to the customer as a single value. The supplier can inform, in the invoice, that the freight is CIF. Thus, he defrays the cost of freight and absorbs all expenses without the customer having to pay additional costs.

FOB, as it is not included in the price of products, has the value specified in the invoice. Once indicated in the document, it comprises the basis for calculating taxes such as the Social Integration Program (PIS), the Tax on Industrialized Products (IPI), the Tax on Operations Relating to the Circulation of Goods and on Services Rendered (ICMS) and Contribution to Financing of Social Security (Cofins).